Marcus & Millichap, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

Income Taxes

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

13.

Income Taxes

The Company’s effective tax rate for the three months ended March 31, 2019 was 26.6%, compared to 25.9% for the three months ended March 31, 2018. The Company provides for the effects of income taxes in interim financial statements based on the Company’s estimate of its annual effective tax rate for the full year, which is based on forecasted income by jurisdiction where the Company operates, adjusted for the tax effects of items that relate discretely to the period, if any.

The provision for income taxes differs from the amount computed by applying the U.S. federal statutory rate to income before provision for income taxes and consisted of the following (dollars in thousands):


	Three Months Ended March 31,
	2019						2018
	Amount			Rate			Amount			Rate
Income tax expense at the federal statutory rate	$	4,472			21.0	%	$	5,106			21.0	%
State income tax expense, net of federal benefit		894			4.2	%		1,097			4.5	%
Windfall tax benefits, net related to stock-based compensation		(265	)		(1.2	)%		(217	)		(0.9	)%
Change in valuation allowance		259			1.2	%		40			0.2	%
Permanent and other items⁽¹⁾		297			1.4	%		276			1.1	%

	$	5,657			26.6	%	$	6,302			25.9	%

⁽¹⁾	Permanent items relate principally to compensation charges and meals and entertainment.